T

he establishment of the Financial Services Authority (OJK), is expected to further raise the level of financial literacy of every Indonesian.

As stipulated in Law No. 21/2011, the OJK is an independent agency which is responsible for supervising financial institutions ranging from banks, insurance firms and finance companies to retirement funds and the stock market.

Thus, all activities in the financial sector should be managed regularly, fairly, transparently and accountably and the authority is capable of creating a sustainable and stable financial system as well as protecting the interests of consumers and the public.

Aside from that, the OJK also bears the responsibility of educating people to become more financially literate.

A recent survey conducted by the OJK revealed that over 75 percent of Indonesians have insufficient literacy when it comes to financial products and services.

Simply put, financial literacy can be defined as knowledge and understanding of money and finances and the ability to confidently apply that knowledge and understanding to make effective financial decisions.

Knowing how to make sound money decisions is a core skill in today'€™s world.

It affects our quality of life, the opportunities we can pursue, our sense of security and our overall emotional and physical well-being.

The changes in Indonesian society and the growing range of financial products and services have increased the importance of having sound financial literacy skills.

Improved financial literacy can boost economic participation and social inclusion, drive competition and market efficiency in the financial services sector, as well as contributing to the economic health of society.

One of the strategies to help Indonesians improve their level of financial literacy is through education.

As we know, education is a strategic and crucial sector. Fostering skills, knowledge, attitudes and values can be conducted through education.

Hence, it is the right decision that the OJK is now working with the Education and Culture Ministry as well as with eight universities to promote people'€™s knowledge and understanding of financial matters.

The eight universities which have been cooperating with the OJK are the Bogor Agricultural Institute (IPB), Sekolah Tinggi Ilmu Ekonomi Indonesia, Sekolah Tinggi Manajemen IMMI, Gadjah Mada University (UGM) in Yogyakarta, the University of Indonesia in Jakarta, Malang Muhammadiyah University, Trisakti University and Wahid Hasyim University in Semarang.

We hope there will be more and more higher-education institutions that are willing to cooperate with the OJK in order to improve people'€™s knowledge and understanding about the financial sector as well as financial products and services.

It is also expected that the OJK will cooperate with our primary and secondary education institutions in achieving the same goal since young people today are increasingly interacting with money from an earlier age, and are increasingly the target of corporate interests and consumer marketing through social media and mobile phones.

Therefore, in this regard, financial-literacy education at school, both at primary-school and secondary-school level, is particularly vital.

Through financial literacy education, it is expected that students will be equipped for life'€™s financial decisions; will be better adjusted in their own consumer behavior; will know the questions to ask to make smart financial decisions; and will be provided with the knowledge and skills enabling them to secure and improve their financial well-being.

In some countries, efforts to increase financial literacy have been made through the formal school curriculum by integrating financial literacy into the relevant curriculum areas such as civics, economics, information and communication technology, language, mathematics and science.

The OJK and the Education and Culture Ministry should take such efforts into account.

Meanwhile, efforts to raise the level of financial literacy through informal education such as seminars, short training courses and workshops targeted at different groups of people within society should also be continuously conducted by the OJK.

Thus, all segments of our society will have equal opportunities to gain sufficient knowledge and understanding of the financial sector and financial products and services.

The writer is freelance columnist based in Cimahi, West Java.